A Letter About Regulation Was Penned by FanDuel CEO

A big scandal several weeks ago set of a big problem in the daily fantasy sports world. An employee from DraftKings used inside information not available to the public to place bets on FanDuel and win prizes that totaled in the mid six-figure range. This was obviously a big problem, and it's brought up a ton of heat with the government who are looking to step in and regulate the industry.

Yet Another Call for Regulation

This isn't the first call for regulation by a daily fantasy sports company. A few weeks ago, the Amaya Gaming Group also called for regulation after that scandal initially went public. Everyone seems to believe that there need to be rules in place to keep things like this from happening again because it undermines the integrity of the industry as a whole and puts players in a situation where they can't really be sure if they're in fair games or not.

UIGEA-Related Questions

One issue when it comes to regulation is where daily fantasy sports stands in terms of the UIGEA. Some people think it's clearly covered from the carve-out for fantasy sports. However, a key author of the bill has said that daily fantasy sports wasn't really imagined at the time of the writing of the UIGEA. In either event, it clearly falls under the definition of that particular type of betting, and it's something that's going to be brought up for better or worse.

What's important to point out is that the UIGEA does not make any type of betting legal or illegal. The relevant part of the UIGEA that applies here is that a gambling site has to be licensed by the proper US jurisdiction to operate in the US, and an exception is granted to fantasy sports (among other things). While this doesn't supercede state laws (as has been seen in Nevada and a few other areas), it does mean that the UIGEA cannot be used to try to outright ban daily fantasy sports. Along these lines, it's going to be hard for these regulations to really cut out the industry as a whole, even if it ends up making things inconvenient for players and/or the sites themselves.

Related News

For the past six months or so, daily fantasy sports have been dealt setback after setback in what seems to be a series of dominoes that are taking their sweet time in falling over. For about 18 months, the top DFS providers got a ton of attention through aggressive marketing tactics and sponsorships and deals with everything from ESPN to major league sports teams. After a scandal broke last fall, they've seen a lot of negative attention as well.
The Most Recent Developments
Vantiv Inc.

Over the past few months, there have been a lot of questions about the legality of daily fantasy sports in multiple states. The Attorney General for New York sent a cease and desist letter to major companies like FanDuel and DraftKings, and they also hit some resistance from the AG in Illinois. Now the Attorney General of Maryland Brian Frosh has stated that it's not allowed under existing laws in the state.
Where to Go From Here
From here, Frosh has suggested one of two things.

Daily fantasy sports have come under fire in New York from their Attorney General, and the biggest names in the business were forced to make a deal with the AG from Illinois after she determined that the events were illegal in that state as well. The Attorney General in Texas, however, is taking his sweet time with coming out with an opinion on the matter.
Why the Delay?